Water companies, farmers and businesses are bound by abstraction laws that date back to the 1960s. But the Environment Agency has warned that practices are harming conservation sites.

The plans also include big changes in the operation of the water industry, aimed at making it more "resilient and efficient".

Additionally, all businesses and public sector services will be free to buy supplies from any water company.

The move will allow large businesses with multiple bases, such as supermarkets, to negotiate one bill for the company rather than numerous individual payments.

A consultation will start "shortly" to look at suppliers' powers for handling debtors, who reportedly cost every household £15 a year.

Suppliers will also be asked to devise new social tariffs for householders struggling to pay their bills.

Spelman said: "Currently we enjoy clean water at the turn of a tap and watch it drain away without a thought. But parts of England actually have less rainfall per person than many Mediterranean countries.

"Making sure we've got enough water for everyone is going to be one of the major challenges this country will have to deal with in the years ahead."

Paul de Zylva, Friends of the Earth's nature campaigner, said: "Households, farmers and wildlife across the UK are being left high and dry by ministers' failure to properly manage our precious water supplies.

"We can't keep lurching between floods, droughts and hosepipe bans. A national water strategy is long overdue.

"Fast action is needed to cut water waste, tackle floods and prevent our rivers and wildlife being sucked dry."

Rose Timlett, freshwater policy officer at the conservation group WWF, said: "It's great to see that the government is taking a fresh and innovative approach to protecting our rivers and wildlife in its white paper.

"With winter drought affecting many parts of the country, the challenge now is to urgently make these proposals a reality so that our rivers can start to recover as quickly as possible.

"One key area that still needs to be addressed is how to support the comprehensive rollout of water meters.

"Combined with social tariffs and water efficiency measures, this is the cheapest and fairest way for people to reduce their water usage, and the government needs to set out more detail on this."

• The original article incorrectly stated that a consultation on handling bad debtors would start in 2013.